Arabic version: محكمة الاستئناف ترفض عقود الرياضة في أسواق التنبؤ
According to Cnbc, the 9th U.S. Circuit Court of Appeals ruled that sports-related event contracts are not “swaps,” dealing prediction-market platforms a setback in their dispute with state regulators. The court rejected requests by Kalshi, Crypto.com and Robinhood for injunctive relief against the Nevada Gaming Control Board.
Nevada has sought to halt the platforms’ sports-related offerings, which it says are gambling products outside the state gaming board’s framework. Forty-four states argue the contracts are sports betting. The platforms and the Commodity Futures Trading Commission contend that all event contracts are federally regulated derivatives. In its opinion against Kalshi, the court said the sports contracts were not swaps because they were sports bets.
The Nevada Attorney General’s office called the ruling a major victory. Deputy communications director Alcinia Whiters said Kalshi had sought to avoid Nevada gaming laws by describing sports-wagering products as federally regulated financial instruments, and said the court affirmed the state’s authority. The CFTC said the court correctly recognized that swaps are exclusively regulated by the commission, but wrongly concluded that sports-related event contracts do not meet that definition.
The decision conflicts with an April ruling by the 3rd U.S. Circuit Court of Appeals, which found that only the CFTC has jurisdiction over sports-related event contracts. Columbia Law School professor Joshua Mitts described the differing decisions as a classic circuit split and said the controversy is likely to reach the Supreme Court. Robinhood said it plans to appeal. Shares of DraftKings rose 7%, while Flutter Entertainment gained more than 6% following the ruling.
